Accrue the estimated warranty cost

Reference no: EM131812539

Prepare adjusting entry for warranty costs.

On December 1, Bruney Company introduces a new product that includes a one-year warranty on parts. In December, 1,000 units are sold. Management believes that 5% of the units will be defective and that the average warranty costs will be $90 per unit. Prepare the adjusting entry at December 31 to accrue the estimated warranty cost.

Reference no: EM131812539

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